DoD's $15.8M FIAR Support Contract Awarded to Castro & Company, LLC for Accounting Services

Contract Overview

Contract Amount: $15,797,100 ($15.8M)

Contractor: Castro & Company, LLC

Awarding Agency: Department of Defense

Start Date: 2022-09-30

End Date: 2025-09-29

Contract Duration: 1,095 days

Daily Burn Rate: $14.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINANCIAL IMPROVEMENT AND AUDIT REMEDIATION SUPPORT (FIAR)

Place of Performance

Location: FORT GREGG ADAMS, PRINCE GEORGE County, VIRGINIA, 23801

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $15.8 million to CASTRO & COMPANY, LLC for work described as: FINANCIAL IMPROVEMENT AND AUDIT REMEDIATION SUPPORT (FIAR) Key points: 1. Contract focuses on critical Financial Improvement and Audit Remediation (FIAR) support, essential for DoD's financial accountability. 2. Castro & Company, LLC, a relatively small firm, secured this significant contract, indicating potential for specialized expertise. 3. The contract's duration of 1095 days (3 years) suggests a long-term need for these services. 4. Awarded as a Delivery Order under a larger contract, its specific value is $15.8M, with a base contract value of $14.4M. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The procurement method, 'Full and Open Competition After Exclusion of Sources,' warrants further investigation into the rationale for excluding other sources.

Value Assessment

Rating: fair

The contract value of $15.8M for three years of FIAR support appears reasonable given the complexity of DoD's financial systems. However, without specific benchmarks for FIAR support services, a precise value-for-money assessment is challenging. The firm fixed-price structure is generally favorable for the government, as it caps costs. Further analysis would require comparing this contract's per-diem rates or total cost to similar engagements for other federal agencies or within DoD itself.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This procurement method implies that while the initial solicitation was open, specific sources were later excluded, or that the competition was limited to a pre-selected group of contractors. The exact number of bidders and the justification for excluding other potential offerors are not detailed, making it difficult to fully assess the level of competition and its impact on price discovery. A more transparent competition process could potentially yield better pricing.

Taxpayer Impact: The limited competition raises concerns about whether the government received the most competitive pricing possible. Taxpayers may have paid more than they would have in a truly full and open competition.

Public Impact

The Department of Defense benefits directly through improved financial management and audit readiness. The services delivered are crucial for achieving auditable financial statements, a key government-wide initiative. The geographic impact is primarily within the Department of Defense's operational and administrative centers, likely concentrated in Virginia where the contractor is based. The contract supports specialized accounting and auditing professionals, potentially impacting the workforce in the accounting services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The procurement method 'Full and Open Competition After Exclusion of Sources' requires scrutiny to ensure fair competition and optimal pricing.
Lack of detailed competition metrics makes it difficult to ascertain if the government secured the best value.
The specialized nature of FIAR support means a limited pool of qualified contractors, potentially impacting long-term competition.
The contract's significant value necessitates robust oversight to ensure performance and prevent cost overruns, despite the FFP structure.

Positive Signals

Award to a single entity suggests specialized expertise in a critical, complex area (FIAR).
Firm Fixed Price contract structure transfers cost risk to the contractor, benefiting the government.
The contract duration indicates a sustained commitment to addressing audit remediation, a positive sign for financial accountability.
The contract supports a vital government function (audit remediation) essential for financial transparency and compliance.

Sector Analysis

The Financial Improvement and Audit Remediation (FIAR) support sector is a niche but critical area within government contracting, particularly for large, complex organizations like the Department of Defense. This contract falls under accounting and financial consulting services. The market for FIAR support is driven by legislative mandates and agency-wide initiatives to achieve auditable financial statements. While specific market size data for FIAR support is not readily available, the overall government spending on accounting and auditing services is substantial, with significant portions allocated to complex remediation efforts.

Small Business Impact

This contract was not set aside for small businesses, and the contractor, Castro & Company, LLC, is identified as a small business. However, the contract's value and nature suggest it may be a prime contract where a small business is performing the work directly. Further investigation into subcontracting plans would be necessary to determine the extent of small business participation beyond the prime contractor. The award to a small business in this specialized area is a positive signal for the small business ecosystem, demonstrating their capability to handle significant government contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the contracting officer within the Department of Defense. The firm fixed-price nature of the contract provides a degree of cost control. Transparency regarding the specific justifications for the 'Exclusion of Sources' in the competition process would enhance accountability. Regular performance reviews and adherence to reporting requirements stipulated in the contract are key accountability measures. Inspector General involvement would be triggered by any allegations of fraud, waste, or abuse.

Related Government Programs

Financial Improvement and Audit Remediation (FIAR) Initiatives
Department of Defense Financial Management
Accounting and Auditing Services Contracts
Government Financial Reporting Support

Risk Flags

Limited Competition Justification
Potential for Higher Costs due to Limited Bidders
Need for Robust Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.8 million to CASTRO & COMPANY, LLC. FINANCIAL IMPROVEMENT AND AUDIT REMEDIATION SUPPORT (FIAR)

Who is the contractor on this award?

The obligated recipient is CASTRO & COMPANY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $15.8 million.

What is the period of performance?

Start: 2022-09-30. End: 2025-09-29.

What is the specific justification for using 'Full and Open Competition After Exclusion of Sources' for this contract, and what impact did this have on the number of bids received?

The specific justification for 'Full and Open Competition After Exclusion of Sources' is not detailed in the provided data. This procurement method typically means that while the solicitation was intended to be open, certain sources were either excluded from the outset based on specific criteria, or were excluded after initial evaluation. This can occur for various reasons, such as unique capabilities required, prior performance issues with certain contractors, or specific socio-economic program requirements. The impact on the number of bids is significant; such exclusions inherently limit the competitive pool, potentially leading to fewer offers than a truly unrestricted full and open competition. Without further documentation from the agency, it's impossible to determine the exact number of bidders or the precise rationale, which is crucial for assessing whether the government obtained the best possible value and if the exclusion was justified.

How does the $15.8 million contract value compare to typical spending for similar FIAR support services within the DoD or other federal agencies?

Benchmarking the $15.8 million contract value for FIAR support requires access to proprietary cost data and detailed scope of work comparisons, which are not publicly available. However, FIAR support is a complex and specialized service, particularly within the Department of Defense due to its vast scale and intricate financial systems. Contracts for similar audit remediation and financial improvement services for large federal agencies can range from several million to tens of millions of dollars annually, depending on the agency's specific challenges, audit readiness status, and the duration of the engagement. Given that this contract spans three years (1095 days), the annual value is approximately $5.27 million. This figure appears within a plausible range for specialized financial consulting services supporting a major federal entity's complex audit remediation efforts. A more precise comparison would necessitate analyzing the specific deliverables, labor categories, and rates against other DoD or agency contracts for FIAR or similar financial improvement initiatives.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of Castro & Company, LLC's performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or metrics for evaluating Castro & Company, LLC's performance. However, for a Financial Improvement and Audit Remediation Support (FIAR) contract, typical KPIs would likely focus on the contractor's ability to assist the DoD in achieving audit readiness and remediation goals. These could include: timely delivery of financial reports and analyses, successful identification and resolution of financial statement discrepancies, progress made towards auditability of specific financial systems or accounts, adherence to regulatory and compliance standards, and the quality and accuracy of advice provided. Performance would also be assessed based on the contractor's contribution to meeting specific milestones set forth in the contract's Statement of Work (SOW) and the overall improvement in the DoD's financial posture and audit outcomes. Regular progress reports and formal performance reviews would be standard mechanisms for tracking these KPIs.

What is Castro & Company, LLC's track record with federal contracts, particularly in the area of financial improvement and audit remediation?

Castro & Company, LLC has a track record of performing federal contracts, including those related to financial services and accounting. While the provided data highlights this specific $15.8 million FIAR support contract with the Department of Defense, a comprehensive review of their past performance would involve examining their contract history across various federal agencies. Their ability to secure a significant contract like this suggests they possess the necessary qualifications and experience in areas such as financial improvement, audit liaison, and remediation support. Further due diligence would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) if available, to gauge their reliability, quality of work, and adherence to contract terms on previous engagements. Their status as a small business performing a large contract also indicates a capacity for growth and successful execution in specialized federal markets.

What is the historical spending trend for FIAR support services within the Department of Defense, and how does this contract fit into that trend?

Historical spending on Financial Improvement and Audit Remediation (FIAR) support within the Department of Defense has been substantial and is driven by ongoing efforts to achieve full auditability of its financial statements, a mandate that has been in place for many years. The DoD consistently allocates significant resources towards these services, often through multiple contracts awarded to various firms specializing in accounting, auditing, and financial consulting. This $15.8 million contract awarded to Castro & Company, LLC represents one component of the DoD's broader FIAR strategy. It fits into a trend of sustained investment in addressing complex financial management challenges. While specific year-over-year spending figures for FIAR support are not provided, the continued awarding of such contracts underscores the persistent need and the government's commitment to improving financial transparency and accountability across its vast operations. This contract likely contributes to specific remediation efforts or audit cycles within the DoD's ongoing financial transformation journey.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: S5121A22R0002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1635 KING ST, ALEXANDRIA, VA, 22314

Business Categories: Category Business, DoT Certified Disadvantaged Business Enterprise, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,549,663

Exercised Options: $15,797,100

Current Obligation: $15,797,100

Actual Outlays: $3,360,245

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAD18D0008

IDV Type: IDC

Timeline